Agenda item

The Panel considered a report of the Police and Crime Commissioner which advised of the proposed level of precept for 2014/2015 (for copy see file of Minutes).

The Commissioner presented the proposals put forward by the Chief Finance Officer and the Chief Constable and outlined budgetary pressures facing the Police over the forthcoming years.

The report gave details of the budget and savings proposed in 2014/2015 together with the precept to be levied in the financial year. The Commissioner also highlighted key proposals for expenditure from the Capital Budgets for 2013/2014 and 2014/2015.  The Chief Finance Officer informed the Panel that while the report recommended a 2% precept increase, the Council Tax capping criteria for 2014/15 had not yet been announced, and Appendices 5(a) and 5(b) showed the relevant figures for a 1.5% and 1% increase.

Mr N Vaulks, while recognising the good financial management which was in place in the force, asked why the capital receipts from the sale of the Aykley Heads site were not included in the budget figures, as these could have an impact on the revenue budget.  He asked that the Commissioner consider these capital receipts prior to considering a precept for 2014/15.  Mr Vaulks also referred to the consultation on the precept carried out by the Commissioner which showed that a majority of people who took part in the online consultation felt that Council Tax levels should remain the same, while accepting that there had been a consensus that a 2% increase would be acceptable from attendees at meetings.  The force remained in a strong position with its reserves and Mr Vaulks requested that the Commissioner reconsider his proposed precept increase.

The Chief Finance Officer, referring to capital receipts from the sale of the Aykley Heads site, informed the Panel that although a preferred developer for the site had been identified, no legal contract had yet been completed.  Payments for the site would be on a staged basis, with the first stage of payments not expected until the 2015/2016 financial year.  Once the payment amounts were known, these would be reflected in the MTFP.

The Commissioner replied that there had been unanimity from attendees at consultation meetings to accept a 2% rise in precept for 2014/2015 when it had been explained that Durham had a very low Council Tax base.  This meant that cuts in central government grant had a greater impact on Durham than on other forces because Durham raised only approximately 23% of its budget from Council Tax, whereas other forces such as North Yorkshire raised 45% of their budget from Council Tax and Surrey 49%.  Therefore, any reduction on grant from central government affected over 75% of Durham’s budget.  Additionally, as well as reductions in government grant, some money from the budget was top-sliced.  In 2013/14 £¹/₄m of the police budget had been top sliced to the IPCC, and in 2014/15 this figure would increase to £½m.  The force was committed to maintaining front line services, whereas some forces had withdrawn from neighbourhood policing.  The budget of the Commissioners office had been reduced from £1.2m when elected to around £1m and staff numbers had reduced from 10 fte staff to 6.5 fte staff.  It was prudent to maintain reserves at around the 4% to 5% level.  Although some Commissioners had started to use reserves to employ staff, this funding was not sustainable.

Ms K Larkin-Bramley referred to page 9 of the report and asked how cost improvements were managed and risks identified, adding that as the budget became more challenging, more information on risks would be required.

The Chief Finance Officer replied that Commanders had been given a target to reduce head count by 10% over a period of 3 years.  Consideration would then be given to what the service would look like with a 10% head count reduction while maintaining neighbourhood policing.  There were increases in service demand and changes in types of crime which also needed to be considered.

Councillor Harker referred to the year on year budget reductions and the inability to make police officers redundant and expressed concern that the force seemed to be relying on officers retiring to make reductions in officer numbers.  He asked whether any representation had been made to the Home Office to allow forces greater flexibility to make officers redundant.

The Chief Finance Officer informed the Panel that the Windsor report, which considered police officer and staff remuneration and conditions published in 2011, had recommended the ability to make to make police officers redundant.  However, the Police Federation had objected to this and the matter had been referred to the Police Arbitration Tribunal which had recommended to the Home Secretary that forces not be given this ability.  Although there was a scheme on place to allow for voluntary redundancies, this was very expensive.  Regulation A19 of the Police Pensions Regulations allowed forces to make officers redundant once they had reached 30 year’s service, however this would result in the force losing officers at a faster rate.

Councillor Harker asked that if the capping increase was restricted to 1.5%, where the necessary additional savings would be made.  The Chief Finance Officer replied that this 0.5% difference equated to approximately £125,000 and this was within tolerances which could be achieved through budget management throughout the year.

Councillor Armstrong informed the Panel that most Local Authorities would not be taking the Government Freeze Grant for the forthcoming year, and the amount of the Freeze Grant was not yet known.  There was a need to provide an efficient police service which operated within communities and also a need to protect the public.

Councillor Boyes asked whether there were any recommendations for the level of reserves which should be maintained.  The Chief Finance Officer replied that CIPFA provided guidance on this, and for a force the size of Durham, this level should be 4% to 5%.  Durham’s reserves were at the top end of this level at 5% and the Auditors were content with this level.

In reply to a question from Councillor Jones regarding the income from the sale of the Aykley Heads site, the Chief Finance Officer replied that the force was aware of the approximate amount which would be received.  Councillor Jones referred to PCSO’s in Darlington who spent one shift each month in charity shops in the town and suggested that this may not be the best use of their time.  The Commissioner replied that he would follow up on this following the meeting and would provide feedback to Councillor Jones.

Resolved:

That the proposed precept for 2014/2015 as outlined in the report be accepted.